Hong Kong may be 'restrained' by new global tax rules, finance chief says

A boat crosses Victoria Harbour in Hong Kong on June 29, 2020.
A boat crosses Victoria Harbour in Hong Kong on June 29, 2020.PHOTO: REUTERS

HONG KONG (BLOOMBERG) - The proposed changes to the global tax regime may affect some of the tax concessions the Hong Kong government offers to various industries, Financial Secretary Paul Chan said.

Speaking in the city's legislature on Monday (June 7), Mr Chan addressed the agreement by the Group of Seven finance ministers on the weekend for a minimum corporate tax rate of "at least 15 per cent" for multinationals and upcoming broader talks.

"We would like to use low tax rates to promote development for certain sectors, so we may be restrained by using low tax rate regime as a competitive method," Mr Chan said in response to a lawmaker's question.

"So we may have to resort to alternative method." Mr Chan's comments were translated from Cantonese.

The reform talks led by the Organisation for Economic Cooperation and Development "will change the global tax landscape" and the city will strive to maintain a simple tax regime to maintain competitiveness, Mr Chan said.